Regional report

Turkey - Turkish Furniture Industry At A Glance

By Zeki Yucel, Furniturk Magazine

Sultan Ahmed Mosque,
Istanbul, Turkey

Turkey’s rapid emergence as
one of the fastest growing economies
of the world and one of the developing
markets in the last few years affected
furniture industry positively. In recent
years, the Turkish furniture industry has become one
of the driving forces behind the Turkish economy.
Thanks to globalization, innovative improvements
and brand marketing strategies, furniture production
in Turkey has improved its international reputation
and has expanded into new markets. Even in
economic crisis period, the volume of furniture
sector in Turkey and its influences in international
markets continued to grow by making a successful
increase year by year. And now, Turkish furniture
industry has expanded into a sector whose exports
are around 2 billion USD annually.

In fact, the design and branding concepts are
relatively new in Turkey. Turkish furniture producers
became aware of the importance of these terms only
in last 10 years. But they forged ahead promptly.
While they were companies copying from Europe
15 years ago, during this period Turkish companies
discovered the role of original design to sell their
products especially abroad. They started to work
with famous designers and create their own style
and brands. Today all aspects of “design” is studied
in around 10 different universities and qualified
designers graduated from there.

They are now working for famous Turkish brands
and some of them became famous in international
platforms and they are awarded by worldfamous
design contests. As a furniture exporting
country, Turkey is investing a lot for improving its
production technology, for modern management,
marketing, sales, R&D and branding process. Most
of Turkish exporters meet strictly international
quality standards. Turkish furniture firms have
begun to employ more designers to develop new
styles and to meet the everchanging tastes of
customers. In this respect, Turkey’s strong textile
industry, which offers a wide range of colorful
fabrics, is a major advantage for Turkish furniture
manufacturers and Turkish designers are widely
using this advantage to offer a wide range of
fabric collections as upholstery.

SOME FACTS and FIGURES ABOUT
DOMESTIC FUNITURE MARKET

Turkey has a developed domestic furniture market
with around 10 billion USD size. It is estimated that
the sector comprises about 35.000 manufacturing
companies and 40,000 retailers. In Turkey,
approximately 260,000 employees are directly
involved in furniture production, while the sector
generates roughly 500,000 positions when side
industries are taken into account.

As per the data stated in the report issued by
Furniture Industrialists Association of Turkey in
2012, while production in Turkey with wholesale
prices was 4.8 billion dollars in 2008, it reached 6
billion dollars in 2011 with an increase of 25%. And
the consumption with retail prices increased to 10
billion dollar from 7 billion (nearly 50% increase).

There are some main reasons for this: Rapid
urbanisation, a significant increase in disposable
income, and lifestyle changes. Turkish furniture
manufacturers have increased their production
capacity during this period in line with the growing
demand for Turkish furniture.

Country

2010

2011

Percentage Change

Percentage of Total Imports

China

222.3

277.6

+25

35

Italy

62

83.9

+38

10

Germany

68.3

81.1

+19

10

Poland

34.1

46.4

+36

6

France

32.6

39.2

+20

5

Spain

26.6

36.4

+37

5

Romania

12.3

24.6

+100

3

Indonesia

17.7

20.2

+100

3

Vietnam

17.8

20.1

+13

3

United Kingdom

6

19.7

+230

2

Japan

16.2

15.1

-7

2

Furniture Imports By Country (In US$ Million)
(Source: TUIK)

FURNITURE IMPORTS of TURKEY

As to the imports, we can say that in last 10 years,
the value of Turkey’s furniture imports has been
growing at a decreasing rate. In 2011, Turkish imports
amounted to US$945.2 million – approximately 55
percent of total exports. This value represented a 28
percent increase from 2010. However this figure is
still lower than the increase in imports experienced in
2010 from the year before, which was 38 percent.

Turkish furniture industry experienced a trade
surplus in 2011, with export volume nearly double
of import volume. Net trade last year amounted
to a surplus of around US$758.7 million. Since 2009, Turkish exports have increased by around
20 percent annually, and this trend is expected to
continue this year.

Looking to the export figures, we can say that
China strengthened its position as Turkey’s top
provider of furniture imports. In 2011, China’s
exports to Turkey reached around 300 million
USD, which accounted for 35 percent of all of
Turkey’s furniture imports according to 2011
figures. Italy, Germany, Poland and Spain follows
China. The other countries that Turkey imports
furniture are respectively Romania, Indonesia,
Vietnam, UK and Japan. In 2011, Romania and the
UK registered the largest percentage increases in
Turkey’s furniture imports by 100 percent and 230
percent respectively.

FURNITURE EXPORTS of TURKEY

Today, Turkey stands as the 16th largest producer
and 21st largest exporter of furniture in the world,
with a global market share of nearly 2 percent,
according to the data provided by CSIL.

Turkey currently exports to a total of 173 countries
across five continents. From 2003 to 2011, Turkey
experienced growth in exports of over 292 percent.
The growth during this period was strong and stable
except in 2009, when the global financial crisis
caused exports to contract by 13 percent. Turkish
Furniture Industrialists Association is anticipating
that Turkey will be among the first 10 exporters of
the world in furniture sector within the following 5
years, considering the export growth by 20% in last
2 years and considering that the same growth level
will also occur in next 2 years.

Parallel to the development of the market, during
last decade Turkish furniture producers are opened
sequentially many showrooms in all over the world.
Especially in last couple of years there was a boom
in outstanding target markets and the number of
abroad showrooms is doubled more than twice.
According to the data provided by Unified Brands
Association BMD, in 91 different countries 2, 600
Turkish brands are sold in their own showrooms.
Within these markets, the share of Muslim and
oriental countries are significant.

Not only does the country benefit from a unique
geographic position serving as a bridge between
East and West, but of equal importance, the country’s
long history and reputation for producing classic
oriental designs, popular with Turkey’s immediate
eastern neighbors, suggests that the country will
be best placed to extend its sales to neighboring
Middle Eastern and Central Asian markets whose
“disposable income” is increasing at a much more
rapid rate than those of the European markets.

Iraq, Germany and Iran compose the first three
of the countries which Turkey performs furniture
export. (And than comes respectively Azarbaijan,
France, Turkmenistan, Netherland, Russia, Saudi
Arabia and Italy within first 10 destinations).

STRENGTHS and WEAKNESS of
TURKISH FURNITURE INDUSTRY

As known, Turkey is one of the European countries
(may be the sole) that is not so much affected
relatively by the global crisis due to its strong
independent banking industry –compared with most
of European countries-, flexible economical structure
and social organism familiar with crisis. Turkey had
also a large trading capacity with regions that are
not affected by the banking crises like Middle East,
Northern Africa and Iran.

While many economies have been unable to recover
from the recent global financial recession, the
Turkish economy expanded by 9.2 percent in 2010,
and 8.5 percent in 2011, thus standing out as the
fastest growing economy in Europe, and one of the
fastest growing economies in the world. There are
some important factors affecting positively Turkish
furniture industry. In summary, these are:

a. A crowded (about 80 million) and young
population (25%)
b. Relatively cheap labor force and
production costs
c. Modern technological substructure and qualified
production standards
d. Developing housing industry affecting furniture
sales positively
e. Geopolitical advantages like being on the
crossroads of world trade
f. Ability to trade with Middle East and other
Muslim countries
g. Government supports for exporters

Country

2011

2012

Percentage Change

Percentage of Total Imports

Iraq

181.4

250.7

+38

17

Germany

115.1

147.5

+28

10

Azerbaijan

73.1

97.4

+33

7

Iran

73.5

93.7

+27

6

France

63.2

79.3

+25

5

Turkmenistan

42.1

68.5

+63

5

Holland

40.6

49.6

+22

3

Russia

31.2

43.9

+41

3

Saudi Arabia

25.7

37.9

+48

3

United Kingdom

35.4

35.3

-0.4

2

Italy

27

30

+11

2

Furniture Imports By Country (In US$ Million)
(Source: TUIK)

As to the weakness of Turkish furniture industry, we
can state some factors concerning raw material,
energy and tax burdens peaking time to time. Beside
this we may point out the stuctural characteristics
of the industry: Most of the furniture production are
still realized by small and medium sized companies.
Excluding 100 - 150 funiture producers, the rest
are confronting some problems including financial
strenght, slow modernization, capacity problems,
difficulty to find specialized workforce, lack of
experience and disadvantages of not Furniture
Exports By Country (In US$ Million) (Source: TUIK)
being enough institutionalized.

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